Gables Q1 Total Return Outperforms Sector

ATLANTA, April 30 /PRNewswire/ -- Gables Residential (NYSE: GBP) (the
"Company"), today reported earnings for the first quarter that are in line
with consensus estimates. "Our annualized total return for the first quarter
has outpaced the NAREIT apartment sector by 393 BP and the RMS index by 267
BP," noted Chris Wheeler, CEO. "Our strategy revolves around risk-adjusted
returns, resilient markets and low volatility. The strength of this approach
has positioned us to continue outperforming the sector index."
Funds from operations ("FFO") for the quarter was $22.7 million, or
$0.76 per share (diluted) compared to $22.6 million, or $0.72 per share
(diluted) for the comparable period of 2000. Net income for the quarter was
$0.38 per share (diluted) compared to $0.37 per share (diluted) in the
comparable period of 2000.
The Company will hold a conference call on May 1, 2001 at 11:00 am Eastern
Time (EDT) to review the quarterly financial results, business highlights and
outlook. The number to call to participate is (877) 388-4378. Identify the
call as the Gables Residential First Quarter Earnings Call. The number to
hear a replay of the call is (800) 642-1687. Access Code: 314535. A webcast
of the conference call will also be available on the Company's website at
www.gables.com , with an on-line playback of the conference call available for
30 days following the call.
Operating Results for the Quarter Ended March 31, 2001 Compared to the
Prior Year Period
Same store revenues increased 3.2% and expense growth was 4.0%, resulting
in 2.8% net operating income ("NOI") growth which was in line with the
Company's budgets.
Same Store Communities Operating Results
Market 1Q 01 NOI% Revenues Expense NOI
Atlanta 28.5% 4.2% 2.0% 5.1%
Houston 25.8% 0.2% 4.6% -2.1%
So. Florida 21.7% 4.8% 3.6% 5.3%
Austin 10.1% 7.3% 7.3% 7.3%
Dallas 9.4% 4.9% 5.6% 4.4%
Other 4.5% -3.1% 3.7% -6.8%
Total 100.0% 3.2% 4.0% 2.8%
As of March 31, 2001, the average occupancy of the stabilized portfolio
was 95% and the average monthly rent per apartment home was $920, or $0.93 per
square foot, compared to $873 per apartment home, or $0.88 per square foot, as
of March 31, 2000.
Development Activity
During the quarter the Company announced the contribution of three
development assets into a joint venture with JP Morgan Investment Management
("JPMIM"). Projected costs for the assets are $82 million. The assets are
Gables West Park Village, consisting of 320 apartment homes in Tampa, Gables
Metropolitan II, consisting of 274 apartment homes in Atlanta, and Gables
White Oak, consisting of 186 apartment homes in Houston. The Company noted it
raised capital through the venture format in order to hedge potential capital
market risks in 2002 when the developments are expected to generate earnings.
"We believe it is prudent to raise attractively priced capital now, especially
given the uncertainty in the economy. Our investors count on us to be
defensive, predictable and have low volatility. Raising this capital is
consistent with these objectives," noted Wheeler.
The Company will record a gain on this contribution of approximately
$2.8 million which will be recognized when earned using the percentage of
completion method since Gables serves as the developer and general contractor
for the joint venture. During the first quarter of 2001, the Company
recognized approximately $460,000 of this gain.
The Company's new investments are consistent with its research-driven
strategy focused on six to eight markets characterized by high job growth and
resiliency to national economic downturns. Within these markets, the Company
targets in-fill submarkets defined as areas with high per square foot prices
for single family homes. By investing in resilient, demand driven markets and
submarkets with barriers to entry, the Company expects to achieve its
objective of producing total returns that exceed the NAREIT multi-family
sector average.
Disposition Activity
The Company sold 2.5 acres of land in the Buckhead neighborhood of Atlanta
for $5.4 million during the quarter. A gain of approximately $950,000 was
recognized on the transaction. During the quarter the Company also recognized
$230,000 of deferred gain associated with a previous land sale.
Acquisition Activity
The Company acquired the partnership interests of its venture partner,
JPMIM, in two assets in South Florida during the quarter. The communities
involved were Gables San Michele II, consisting of 343 apartment homes and
Gables Palma Vista consisting of 189 apartment homes. "We realized
significant benefits for our shareowners from the venture financing and now
have 100% of the upside associated with these core investments," stated Jordan
Clark, Chief Investment Officer. The Company expects its South Florida
communities to have above average earnings growth during the next several
years.
Senior Unsecured Notes
During the quarter, Gables completed a $150 million offering of five-year
senior unsecured notes rated Baa2 by Moodys and BBB by S&P. The notes yield
7.29% to maturity with an all-in rate of approximately 7.46%. The net
proceeds from the offering of approximately $148.5 million were used to
paydown borrowings under Gables' unsecured credit facilities and its $40
million term loan.
Non-Recurring Items
The Company recorded a reserve of $400,000 during the first quarter
associated with its equity investment in Broadband Residential, Inc. ("BBR").
The Company supports BBR's business model but has determined a reserve for its
equity investment was warranted due to uncertainties associated with BBR's
ability to raise capital in the current economic environment. Gables is
moving forward with the application of high speed internet access throughout
its portfolio.
In late April, the Company suspended lease-up activities at Gables State
Thomas Ravello in Dallas due to water infiltration issues associated with
faulty roof design and construction. The 290 unit community was 55% occupied.
The Company has a 20% ownership interest in the community. In spite of
preliminary investigations into insurance proceeds, the Company recorded a
construction reserve to earnings of $425,000 in association with planned
remediation activities at the community. Gables State Thomas Ravello is
expected to be back in service prior to year-end.
National Awards
Gables was recognized by the National Association of Homebuilders ("NAHB")
as the winner of two Pillars of the Industry Awards. Gables Metropolitan I in
Atlanta received recognition as the Best Multifamily Development by a REIT and
Gables Palma Vista won in the Best Luxury Multifamily Development category.
This marks the sixth year in a row that Gables has been a winner or a finalist
in the Pillars of the Industry Awards, sponsored annually by the NAHB and
awarded for excellence in the multifamily industry. Gables is a winner of
five previous Pillars Awards, including being named Property Management
Company of the Year and Development Company of the Year, and twelve times has
been a finalist in the competition. Added Mr. Wheeler, "The Pillars of the
Industry Awards focus attention on the best developments and best managers,
and this scrutiny benefits our entire industry by raising the standard of
excellence for everyone."
Forward-Looking Statements
This announcement contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The forward-looking
statements contained in this release are statements that are subject to
certain risks and uncertainties, including, but not limited to, possible
changes in demand for apartment homes, the effects of economic conditions, the
impact of competition and competitive pricing, changes in construction costs,
the results of financing efforts, potential acquisitions under agreement, the
effects of the Company's accounting policies and other matters detailed in the
Company's filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000 under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Certain Factors Affecting Future
Operating Results."
Earnings Release Supplements
The Company produces Earnings Release Supplements ("the Supplements") that
provide detailed information regarding operating, development, redevelopment,
disposition and acquisition activity. These Supplements are available via the
Company's website and through e-mail distribution. Access to the Supplements
through the Company's website is available at
www.gables.com/1qearningsrelease . If you would like to receive future press
releases via e-mail, please register through the Company's website at
http://www.gables.com/ccbn.cfm?script=1900&layout=11 . Some items referenced
in the earnings release may require the Adobe Acrobat 4.0 Reader. If you do
not have Adobe Acrobat 4.0 Reader, you may download it at the following
website: http://www.adobe.com/products/acrobat/readstep.html .
NAREIT Definition of FFO
FFO is used as a measure of operating performance of the Company because
FFO, together with net income and cash flows, provides investors with an
additional basis to evaluate the ability of the Company to incur and service
debt and to fund dividends and capital expenditures. FFO is determined based
on the definition that was adopted by the National Association of Real Estate
Investment Trusts ("NAREIT") in October 1999 and became effective January 1,
2000. The Company's calculation of FFO may not be comparable to FFO reported
by other REITs due to the fact that not all REITs use the same definition.
About Gables
With a mission of Taking Care of the Way People Live(R), Gables
Residential has received national recognition for excellence in the
management, development, acquisition and construction of luxury multi-family
communities in high job growth markets. The Company presently owns 84
communities with 25,218 completed apartment homes and has an additional 10
communities with 2,545 apartment homes under development or lease-up in the
principal cities of Georgia, Texas, Tennessee and Florida. For further
information, please contact the Company at (770) 436-4600 or access the Gables
web site at www.gables.com .
Detailed schedules of financial information follow:
GABLES RESIDENTIAL
Selected Financial Information
March 31, 2001
(Unaudited and amounts in thousands, except for per share data)
For the three months ended
March 31,
2001 2000
Statement of Operations Information:
Revenues:
Rental revenues $53,234 $54,398
Other property revenues 2,914 2,943
Total property revenues 56,148 57,341
Development revenues, net 7 696
Other revenues 2,000 2,489
Total other revenues 2,007 3,185
Total revenues 58,155 60,526
Expenses:
Property operating and maintenance
(exclusive of items
shown separately below) 18,071 18,571
Depreciation and amortization 11,022 10,995
Property management - owned 1,406 1,460
Property management - third party 1,156 1,020
Interest expense and credit
enhancement fees 10,749 11,035
Amortization of deferred financing
costs 261 251
General and administrative 1,883 2,169
Unusual items 400 ---
Total expenses 44,948 45,501
Income before gain on sale of real
estate assets 13,207 15,025
Gain on sale of real estate assets 1,638 ---
Income before minority interest 14,845 15,025
Minority interest of common
unitholders in Operating Partnership (2,527) (2,468)
Minority interest of preferred
unitholders in Operating Partnership (1,078) (1,078)
Net income 11,240 11,479
Dividends to preferred shareholders (2,443) (2,443)
Net income available to common
shareholders $8,797 $9,036
Average common shares outstanding -
basic 23,197 24,478
Average common shares outstanding -
diluted 30,012 31,179
Net income per common share - basic $0.38 $0.37
Net income per common share - diluted $0.38 $0.37
Other Information:
Funds from operations per common
share - basic $0.76 $0.72
Funds from operations per common
share - diluted $0.76 $0.72
Dividends declared per common share $0.57 $0.53
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SOURCE Gables Residential Trust

ATLANTA, April 30 /PRNewswire/ -- Gables Residential (NYSE: GBP) (the
"Company"), today reported earnings for the first quarter that are in line
with consensus estimates. "Our annualized total return for the first quarter
has outpaced the NAREIT apartment sector by 393 BP and the RMS index by 267
BP," noted Chris Wheeler, CEO. "Our strategy revolves around risk-adjusted
returns, resilient markets and low volatility. The strength of this approach
has positioned us to continue outperforming the sector index."
Funds from operations ("FFO") for the quarter was $22.7 million, or
$0.76 per share (diluted) compared to $22.6 million, or $0.72 per share
(diluted) for the comparable period of 2000. Net income for the quarter was
$0.38 per share (diluted) compared to $0.37 per share (diluted) in the
comparable period of 2000.
The Company will hold a conference call on May 1, 2001 at 11:00 am Eastern
Time (EDT) to review the quarterly financial results, business highlights and
outlook. The number to call to participate is (877) 388-4378. Identify the
call as the Gables Residential First Quarter Earnings Call. The number to
hear a replay of the call is (800) 642-1687. Access Code: 314535. A webcast
of the conference call will also be available on the Company's website at
www.gables.com , with an on-line playback of the conference call available for
30 days following the call.
Operating Results for the Quarter Ended March 31, 2001 Compared to the
Prior Year Period
Same store revenues increased 3.2% and expense growth was 4.0%, resulting
in 2.8% net operating income ("NOI") growth which was in line with the
Company's budgets.
Same Store Communities Operating Results
Market 1Q 01 NOI% Revenues Expense NOI
Atlanta 28.5% 4.2% 2.0% 5.1%
Houston 25.8% 0.2% 4.6% -2.1%
So. Florida 21.7% 4.8% 3.6% 5.3%
Austin 10.1% 7.3% 7.3% 7.3%
Dallas 9.4% 4.9% 5.6% 4.4%
Other 4.5% -3.1% 3.7% -6.8%
Total 100.0% 3.2% 4.0% 2.8%
As of March 31, 2001, the average occupancy of the stabilized portfolio
was 95% and the average monthly rent per apartment home was $920, or $0.93 per
square foot, compared to $873 per apartment home, or $0.88 per square foot, as
of March 31, 2000.
Development Activity
During the quarter the Company announced the contribution of three
development assets into a joint venture with JP Morgan Investment Management
("JPMIM"). Projected costs for the assets are $82 million. The assets are
Gables West Park Village, consisting of 320 apartment homes in Tampa, Gables
Metropolitan II, consisting of 274 apartment homes in Atlanta, and Gables
White Oak, consisting of 186 apartment homes in Houston. The Company noted it
raised capital through the venture format in order to hedge potential capital
market risks in 2002 when the developments are expected to generate earnings.
"We believe it is prudent to raise attractively priced capital now, especially
given the uncertainty in the economy. Our investors count on us to be
defensive, predictable and have low volatility. Raising this capital is
consistent with these objectives," noted Wheeler.
The Company will record a gain on this contribution of approximately
$2.8 million which will be recognized when earned using the percentage of
completion method since Gables serves as the developer and general contractor
for the joint venture. During the first quarter of 2001, the Company
recognized approximately $460,000 of this gain.
The Company's new investments are consistent with its research-driven
strategy focused on six to eight markets characterized by high job growth and
resiliency to national economic downturns. Within these markets, the Company
targets in-fill submarkets defined as areas with high per square foot prices
for single family homes. By investing in resilient, demand driven markets and
submarkets with barriers to entry, the Company expects to achieve its
objective of producing total returns that exceed the NAREIT multi-family
sector average.
Disposition Activity
The Company sold 2.5 acres of land in the Buckhead neighborhood of Atlanta
for $5.4 million during the quarter. A gain of approximately $950,000 was
recognized on the transaction. During the quarter the Company also recognized
$230,000 of deferred gain associated with a previous land sale.
Acquisition Activity
The Company acquired the partnership interests of its venture partner,
JPMIM, in two assets in South Florida during the quarter. The communities
involved were Gables San Michele II, consisting of 343 apartment homes and
Gables Palma Vista consisting of 189 apartment homes. "We realized
significant benefits for our shareowners from the venture financing and now
have 100% of the upside associated with these core investments," stated Jordan
Clark, Chief Investment Officer. The Company expects its South Florida
communities to have above average earnings growth during the next several
years.
Senior Unsecured Notes
During the quarter, Gables completed a $150 million offering of five-year
senior unsecured notes rated Baa2 by Moodys and BBB by S&P. The notes yield
7.29% to maturity with an all-in rate of approximately 7.46%. The net
proceeds from the offering of approximately $148.5 million were used to
paydown borrowings under Gables' unsecured credit facilities and its $40
million term loan.
Non-Recurring Items
The Company recorded a reserve of $400,000 during the first quarter
associated with its equity investment in Broadband Residential, Inc. ("BBR").
The Company supports BBR's business model but has determined a reserve for its
equity investment was warranted due to uncertainties associated with BBR's
ability to raise capital in the current economic environment. Gables is
moving forward with the application of high speed internet access throughout
its portfolio.
In late April, the Company suspended lease-up activities at Gables State
Thomas Ravello in Dallas due to water infiltration issues associated with
faulty roof design and construction. The 290 unit community was 55% occupied.
The Company has a 20% ownership interest in the community. In spite of
preliminary investigations into insurance proceeds, the Company recorded a
construction reserve to earnings of $425,000 in association with planned
remediation activities at the community. Gables State Thomas Ravello is
expected to be back in service prior to year-end.
National Awards
Gables was recognized by the National Association of Homebuilders ("NAHB")
as the winner of two Pillars of the Industry Awards. Gables Metropolitan I in
Atlanta received recognition as the Best Multifamily Development by a REIT and
Gables Palma Vista won in the Best Luxury Multifamily Development category.
This marks the sixth year in a row that Gables has been a winner or a finalist
in the Pillars of the Industry Awards, sponsored annually by the NAHB and
awarded for excellence in the multifamily industry. Gables is a winner of
five previous Pillars Awards, including being named Property Management
Company of the Year and Development Company of the Year, and twelve times has
been a finalist in the competition. Added Mr. Wheeler, "The Pillars of the
Industry Awards focus attention on the best developments and best managers,
and this scrutiny benefits our entire industry by raising the standard of
excellence for everyone."
Forward-Looking Statements
This announcement contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The forward-looking
statements contained in this release are statements that are subject to
certain risks and uncertainties, including, but not limited to, possible
changes in demand for apartment homes, the effects of economic conditions, the
impact of competition and competitive pricing, changes in construction costs,
the results of financing efforts, potential acquisitions under agreement, the
effects of the Company's accounting policies and other matters detailed in the
Company's filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000 under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Certain Factors Affecting Future
Operating Results."
Earnings Release Supplements
The Company produces Earnings Release Supplements ("the Supplements") that
provide detailed information regarding operating, development, redevelopment,
disposition and acquisition activity. These Supplements are available via the
Company's website and through e-mail distribution. Access to the Supplements
through the Company's website is available at
www.gables.com/1qearningsrelease . If you would like to receive future press
releases via e-mail, please register through the Company's website at
http://www.gables.com/ccbn.cfm?script=1900&layout=11 . Some items referenced
in the earnings release may require the Adobe Acrobat 4.0 Reader. If you do
not have Adobe Acrobat 4.0 Reader, you may download it at the following
website: http://www.adobe.com/products/acrobat/readstep.html .
NAREIT Definition of FFO
FFO is used as a measure of operating performance of the Company because
FFO, together with net income and cash flows, provides investors with an
additional basis to evaluate the ability of the Company to incur and service
debt and to fund dividends and capital expenditures. FFO is determined based
on the definition that was adopted by the National Association of Real Estate
Investment Trusts ("NAREIT") in October 1999 and became effective January 1,
2000. The Company's calculation of FFO may not be comparable to FFO reported
by other REITs due to the fact that not all REITs use the same definition.
About Gables
With a mission of Taking Care of the Way People Live(R), Gables
Residential has received national recognition for excellence in the
management, development, acquisition and construction of luxury multi-family
communities in high job growth markets. The Company presently owns 84
communities with 25,218 completed apartment homes and has an additional 10
communities with 2,545 apartment homes under development or lease-up in the
principal cities of Georgia, Texas, Tennessee and Florida. For further
information, please contact the Company at (770) 436-4600 or access the Gables
web site at www.gables.com .
Detailed schedules of financial information follow:
GABLES RESIDENTIAL
Selected Financial Information
March 31, 2001
(Unaudited and amounts in thousands, except for per share data)
For the three months ended
March 31,
2001 2000
Statement of Operations Information:
Revenues:
Rental revenues $53,234 $54,398
Other property revenues 2,914 2,943
Total property revenues 56,148 57,341
Development revenues, net 7 696
Other revenues 2,000 2,489
Total other revenues 2,007 3,185
Total revenues 58,155 60,526
Expenses:
Property operating and maintenance
(exclusive of items
shown separately below) 18,071 18,571
Depreciation and amortization 11,022 10,995
Property management - owned 1,406 1,460
Property management - third party 1,156 1,020
Interest expense and credit
enhancement fees 10,749 11,035
Amortization of deferred financing
costs 261 251
General and administrative 1,883 2,169
Unusual items 400 ---
Total expenses 44,948 45,501
Income before gain on sale of real
estate assets 13,207 15,025
Gain on sale of real estate assets 1,638 ---
Income before minority interest 14,845 15,025
Minority interest of common
unitholders in Operating Partnership (2,527) (2,468)
Minority interest of preferred
unitholders in Operating Partnership (1,078) (1,078)
Net income 11,240 11,479
Dividends to preferred shareholders (2,443) (2,443)
Net income available to common
shareholders $8,797 $9,036
Average common shares outstanding -
basic 23,197 24,478
Average common shares outstanding -
diluted 30,012 31,179
Net income per common share - basic $0.38 $0.37
Net income per common share - diluted $0.38 $0.37
Other Information:
Funds from operations per common
share - basic $0.76 $0.72
Funds from operations per common
share - diluted $0.76 $0.72
Dividends declared per common share $0.57 $0.53
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SOURCE Gables Residential Trust